SUBMISSION BY CANADA TO THE WORKING PARTY ON STATE TRADING ENTERPRISES
AGRICULTURAL EXPORTING STATE TRADING ENTERPRISES

1  Introduction

1.1. At the 9^th WTO Ministerial Conference (MC9) Ministers adopted the Declaration on Export Competition (WT/MIN(13)/40). Among other things, this established an annual dedicated discussion during the June meeting of the Committee on Agriculture (CoA). The discussion is structured around a report prepared by the Secretariat and updated annually based on Members notifications to the CoA, the Working Party on State Trading Enterprises (STEs) and responses to a questionnaire. The first iteration of this report, Export Subsidies, export credits, export credit guarantees or insurance programmes, international food aid and STEs (G/AG/W/125), was circulated to Members on 21 May 2014.

1.2. Addendum 4 of the report (G/AG/W/125.Add4) specifically addresses agriculture exporting state trading enterprises and therefore is directly relevant to the work of the Working Party on STEs. Canada would encourage other Members to incorporate a review of this paper, and a forthcoming update, in preparation for the next meeting of the Working Party on STEs.

2  Summary of Findings

2.1. In preparation for the first annual dedicated discussion on export competition, which took place during the June 2014 CoA, the Cairns Group prepared a short paper summarizing the key findings of the Secretariat report, Annual Export Competition Review – Submission from the Cairns Group to the 74^th Meeting of the Committee on Agriculture (CoA) in June 2014 (G/AG/W/129). The section of this paper dealing with agriculture exporting STEs is reproduced below for reference.

2.2. Twenty Members notified or reported in their reply to the Secretariat's questionnaire a total of 77 agricultural exporting STEs covering a wide range of agriculture products. A further 20 Members also reported in their reply to the Secretariat's questionnaire that they did not have any agricultural exporting STEs. A positive transparency development was that new and updated information was reported on agricultural exporting STEs by several Members as compared to current STE notifications.

2.3. China (25), Colombia (14) and India (14) reported by far the most agriculture exporting STEs, accounting for 69% of the total reported number by all Members. See Table 1 below.

Table 1 – Number of agricultural exporting STEs per Member

2.4. The distribution by product grouping shows a similar concentration with two product categories (fruits and vegetables, and tobacco) accounting for 45% of the reported agriculture exporting STEs. The next most numerous product category was "wheat and wheat flour, coarse grains and rice" with five such STEs reported. See table 2 below.

Table 2 – Distribution of agricultural exporting STEs by product grouping

2.5. Only six of the 20 Members (Australia, Costa Rica, Israel, Republic of Moldova, New Zealand and Ukraine) responded to the section of the questionnaire requesting information on export values, prices and destinations. Notwithstanding the fact that responses may have been limited by commercial confidentiality considerations, these Members account for just eight STEs (10% of those reported), making it nearly impossible to assess the overall influence of agriculture exporting STEs on global markets. Where such information is provided, export volumes and values generally (but not always) appear small relative to overall global trade in the products in question.

2.6. China reports that STEs for tea and silk were abolished in 2005 and that it has not applied state trading for soybeans since acceding to the WTO in 2001. Canada reports that the Canadian Wheat Board no longer has exclusive control over marketing of any grain. The CWB is in a transition period that may last up to five years, until no later than 31 July 2017, during which it will continue to receive government borrowing guarantees, and have its pool payment levels guaranteed by the government. Ecuador, Indonesia, Israel and Ukraine each reported the establishment of a new agriculture export STE (or marketing boards in the case of Israel) since 2001.

2.7. Of the four developed countries that reported agriculture exporting STEs (one each in

Australia, Canada, New Zealand and Ukraine), those in Australia, New Zealand and Ukraine appear to have export monopoly powers. Of the 74 agriculture exporting STEs reported by 16 developing countries, several appear to have export monopoly powers or other special privileges. The report does not however contain sufficiently detailed trade statistics to determine whether these STEs would meet the Rev.4 modalities general de minimis criteria (Annex K footnote 5). Similarly, while many of the developing country STEs would likely meet the Rev.4 modalities special and differential treatment criteria (Annex K paragraphs 4-6), in most cases more information would be required to make a complete assessment, particularly with respect to paragraph 6.

3  Conclusions

3.1. Some aspects of the review process under the CoA are relevant to the Working Party on STEs, namely the parts of the annual dedicated discussion on export competition and associated Secretariat report that deal with agriculture exporting STEs. Taking this work into account would help to enrich the review process under the Working Party on STEs.

3.2. The reporting of 77 agriculture exporting STEs across 20 Members, some of which appear to have export monopoly powers and/or other special privileges, suggests that these entities may have important impacts of global markets. However, the extent of the impacts is nearly impossible to assess based on current information. This is an area that may warrant further examination.

3.3. In their responses to the Secretariat’s questionnaire, several Members provided new and updated information on agricultural exporting STEs as compared to current STE notifications. While this is a positive development from an overall transparency perspective, it speaks to the need for Members to make greater efforts to comply with notification obligations within the framework of the WP on STEs.

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